Daily Current Affairs Quiz: September 17, 2025

Answer: C [2 and 3 only]
Explanation:

Statement 1 is incorrect: Indifference curves cannot intersect because this would violate the assumption of transitivity of preferences. If two indifference curves intersected, it would imply that the consumer is indifferent between bundles on both curves at the point of intersection, which would lead to a contradiction.

Statement 2 is correct: The slope of an indifference curve represents the rate at which a consumer is willing to trade off one good for another while maintaining the same level of utility, which is the definition of the MRS.

Statement 3 is correct: The consumer’s optimal choice, where utility is maximized given their budget constraint, occurs at the tangency point between the highest attainable indifference curve and the budget constraint. At this point, the MRS equals the price ratio of the two goods.

Statement 4 is incorrect: Perfect substitutes have straight-line indifference curves, not L-shaped ones. L-shaped indifference curves represent perfect complements, where the consumer only derives utility from consuming the goods in fixed proportions.

Answer: C [1, 2 and 4 only]
Explanation:

Statement 1 is correct: Capture Theory suggests that regulatory agencies may become dominated by the very industries they were created to regulate.

Statement 2 is correct: Regulatory agencies lead to regulations that serve the interests of the industry over the public.

Statement 3 is incorrect: The theory was not specifically proposed as part of the New Deal legislation; rather, it has evolved over time as a critique of the functioning of regulatory agencies.

Statement 4 is correct: Capture Theory can lead to a decrease in competition, as the industry might influence regulations to favor established players over new entrants.

Answer: D [All of the above]
Explanation:

Statement 1 is correct. Agricultural products with a fixed harvest period exemplify a situation where supply cannot be immediately increased even if prices rise.  This illustrates the concept of short-run supply inelasticity.

Statement 2 is correct. A perfectly elastic supply curve is a horizontal line, indicating that suppliers are willing to supply any quantity at a specific price, but none at a lower price.

Statement 3 is correct. Technological improvements that lower production costs allow suppliers to offer more at each price level, resulting in a rightward shift of the supply curve.

Statement 4 is correct. A per-unit tax increases the cost of production for the supplier, effectively reducing the quantity they are willing to supply at each price level. This is represented by a leftward shift of the supply curve.

Answer: C [All of the above]
Explanation:

Statement 1 is correct: Inflation, by definition, erodes the purchasing power of money as the same amount of money buys fewer goods and services.

Statement 2 is correct: Deflation represents a sustained decrease in the general price level, contrasting with inflation’s price increases.

Statement 3 is correct: Inflation is indeed measured by tracking the percentage change in a relevant price index like CPI or WPI.

Statement 4 is correct: Hyperinflation is an extremely rapid and uncontrolled form of inflation, generally defined as price increases exceeding 50% per month.

Answer: C [1, 2 and 4 only]
Explanation:

Statement 1 is correct: Carbon pricing is a method aimed at reducing global greenhouse gas emissions by putting a cost on emitting carbon dioxide.

Statement 2 is correct: The two main types of carbon pricing are carbon taxes and cap-and-trade systems.

Statement 3 is incorrect: Not all countries have adopted carbon pricing mechanisms as part of their commitments to the Paris Agreement.

Statement 4 is correct: A carbon tax directly sets a price on carbon by defining a tax rate on greenhouse gas emissions or on the carbon content of fossil fuels.